Croesus Retail Trust - FY14 results above; outperformance to continue. Maintain BUY, target price revised to S$1.10
Croesus Retail Trust(CRT)
reported FY14 net property income and distributable income ahead of
prospectus forecast and our estimates. Positive rental reversions at
Mallage Shobu are expected to drive future growth with additional upside
from acquisitions. FY14 DPU of 8.98 Scts translates to yield of 8.8%.
Due to the better than expected performance, and after incorporating the
latest guidance of 2.13% average all-in cost of debt, our FY15-17F
distributable incomes have been increased by 3-4%. Maintain BUY, target
price revised to S$1.10 (Prev S$ 1.05). While CRT is up 14% YTD and has
outperformed the SREIT index by 6%, we continue to like CRT for its
visible earnings drivers and exposure to the reflating Japanese real
estate market.
2Q14 core profits for IHH Healthcare
increased by 20% y-o-y. Parkway Pantai continued to deliver. We expect
strong earnings CAGR (FY13-16F) of 20% but counter trades at 50x/42x
FY14F/15F PE. Thus, maintain HOLD but target price raised to RM4.54/
S$1.80 as we roll over our valuation base to FY15F from FY14F.
Olam's
FY14 results were below expectations. FY14 core net profit (excluding
exceptional items and biological gains) of S$329m (+29% y-o-y) was below
our S$401m and consensus S$365m estimates. The underperformance was due
to lower than expected volumes and margins. Olam also missed its target
of achieving positive free cashflow to firm (-S$28.7m) by end June 14
due to the impact of higher commodity prices in the confectionary &
beverage ingredients segment. More to follow post results briefing.
Soilbuild REITannounced
the acquisition of 20 Kian Teck Lane, a light industrial property for
S$22.4m. The acquisition is line with SBREIT's portfolio book yield and
is accretive to earnings. Assuming an initial yield of c. 7.0%, and 100%
debt funding, this acquisition will be marginally DPU accretive at c.
1.5% in FY14. Gearing estimated to rise to c. 32%, within management's
comfortable gearing ratio ceiling of c.35%. We maintain our BUY call and
S$0.89 target price. The stock currently offers a dividend yield of
8.3-8.5% for FY15-16F.
Global Logistic Properties
has signed new lease agreements totalling 49,000 sqm with three leading
e-commerce companies in Eastern and Northern China. The customers are
setting up new distribution centers driven by business expansion. Two of
the agreements were signed with existing customers of GLP. Domestic
consumption and ecommerce are the new key drivers for China's economy.
Straco Corporation is buying the 165-metre-high Singapore Flyer
attraction by the Marina Promenade for S$140m.
Stracowill fund the purchase with part of its S$100m cash pile. The company will also be taking on debt.
IPS Securex
has been awarded a contract worth about S$4.5m by HDB for the
installation, leasing and maintenance of Alert Alarm Systems (AAS) for
several blocks of residential housing across Singapore. The AAS is for
use by elderly during emergency. This is the third AAS contract awarded
by HDB. Inclusive of this contract, current order book is about S$24.6m.
Boustead Singapore
has entered into a S$250m coinvestment partnership with Emirates-based
sovereign wealth fund, the Abu Dhabi Investment Council (Adic). The
Boustead Development Partnership (BDP) will develop and redevelop modern
logistics and high quality industrial facilities in Singapore and will
also be the proposed investor for Boustead Projects' future
design-build-and-lease projects, development projects and redevelopment
projects in the industrial property market that meet its specified
investment requirements. Boustead and Adic will each contribute an
equity of S$125m to the BDP which, with leverage, is expected to allow
for an initial investment target in excess of S$600m.
Lum Chang Holdings
has secured a tender for the design and construction of a six-storey
ramp-up warehouse at Toh Guan Road. The contract valued is about S$87m.
This latest award brings the total outstanding value of construction
projects still in progress to about S$490m.
Swee Hong
is expected to report a loss for June FY2014. Further details of the
Group's performance, including the details relating to the expected
loss, will be disclosed when it announces its FY2014 unaudited financial
results.
U.S.
stocks fell as violence in Ukraine and disappointing retail earnings
overshadowed better-than-expected 2Q GDP estimates (actual +4.2%
annualized q-o-q, consensus +3.9%). Other reports showed contracts to
purchase previously owned homes rose more than forecast in July. Guess Inc. sank 8.8% after the retailer cut its annual earnings forecast. RadioShack Corp. shares jumped on speculation that the company will get a rescue financing package that helps it stave off bankruptcy.
Source: DBS
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